Exhibit 99.1
Anika Therapeutics Reports 17% Increase in Third Quarter Product Revenue
Company Reports Strong Initial Sales of ELEVESS in the U.S. Strong Domestic and European Sales Drive Increase in Joint Health Revenue
BEDFORD, Mass.--(BUSINESS WIRE)--November 3, 2008--Anika Therapeutics, Inc. (Nasdaq: ANIK), a leader in products for tissue protection, healing and repair based on hyaluronic acid (“HA”) technology, today reported strong revenue growth for the third quarter of 2008.
“This was another excellent quarter for Anika, as we executed on our strategic goals of bringing our ELEVESS product line to market and broadening our product portfolio and geographic reach in joint health therapies,” said Charles H. Sherwood, Ph.D., Anika’s president and chief executive officer. “It is clear to us that the significant investments we have made during the past year are positioning us well for continued strong revenue growth, not only domestically, but worldwide in each of the markets we serve.”
During the quarter, Anika expanded its global position in joint health therapies with the announcement of a new distribution agreement in Latin America for ORTHOVISC® and ORTHOVISC mini, as well as sales into the European Union for its single-injection osteoarthritis product MONOVISC™, for the relief of knee pain. Domestic revenue from its flagship ORTHOVISC product increased by 26 percent in the United States and Anika also reported strong initial revenue and positive market reception for its breakthrough cosmetic dermal filler product, ELEVESSTM.
Revenue
Anika’s product revenue increased by 17% to $8,524,000 for the third quarter of 2008, compared with $7,283,000 in the same period last year. Product revenue for the nine-month period of 2008 grew 30% to $24,770,000 from $18,989,000 in the nine-month period of 2007. The increase in product revenue for the quarter was primarily attributable to strong domestic and international revenue from the Company’s ORTHOVISC product line, as well as gains from its equine osteoarthritis product, HYVISC, and MONOVISC sales within the European Union.
Total revenue for the third quarter of 2008 increased 16% to $9,205,000, compared with $7,965,000 in the third quarter of 2007. Total revenue for the nine-month period of 2008 increased 26% to $26,814,000 compared with $21,203,000 for the same period in 2007.
Product Gross Margin
Product gross margin for the third quarter of 2008 increased to 59% from 57% in last year’s third quarter. For the nine-month period of 2008, product gross margin increased to 58% compared with 54% for the same period in 2007. The improvement in gross margin for both periods was
due primarily to unit growth and strong domestic and international ORTHOVISC revenue as well as the impact of sales from our new products.
Other Operating Expenses
In accordance with the Company’s plans, research and development expense increased 60% to $1,801,000, compared with $1,256,000 for the same period last year, primarily due to clinical trials in the U.S. and Europe for MONOVISC, manufacturing scale-up activities for ELEVESS and MONOVISC, and development activities in joint health.
As planned, selling, general and administrative expense increased 41% to $2,567,000, compared with $1,821,000 for the same period last year, due to facility costs at Anika’s Bedford facility which commenced in May 1, 2007, increased personnel costs and marketing expenses in connection with new products in the joint health and aesthetic franchises, and higher professional costs related to strategic and corporate projects. Total operating expenses, excluding cost of product revenue, were $4,369,000 for the third quarter of 2008 compared with $2,947,000 for the third quarter of 2007. Total operating expenses, excluding cost of product revenue, for the nine-month period of 2008 were $13,470,000 compared with $8,081,000 for the same period in 2007.
Net Income
Net income for the third quarter of 2008 was $1,104,000, or $0.10 per diluted share, compared with $1,796,000, or $0.16 per diluted share, for the same period last year. Net income for the nine months of 2008 was $2,535,000, or $0.22 per diluted share, compared with $4,362,000, or $0.38 per diluted share, for the same period in 2007. The decrease in net income in the third quarter and nine-month periods of 2008 over last year was due to higher operating expenses, consistent with the company’s plans to invest in its new facility, product development and market expansion.
Other
Anika’s cash, cash equivalents and short-term investments at September 30, 2008 were $35,368,000, compared with $39,406,000 at December 31, 2007. The decrease reflects the Company’s investment in its new facility to increase capacity and upgrade its new product development capabilities. As of September 30, 2008, the Company has expended $27,000,000 of its $30,000,000 project capital budget, of which it has borrowed $8,000,000 under its facility related line-of-credit, and expects to borrow up to an additional $8,000,000 by the end of the year for a total debt outstanding of $16 million.
Management Commentary
“Our joint health franchise continues to be a key driver of Anika’s growth, with revenue from our flagship joint health product, ORTHOVISC, up 25 percent compared with the third quarter of 2007,” said Charles H. Sherwood, Ph.D., Anika’s president and chief executive officer. “During the quarter, we broadened our geographic reach for this product line with the establishment of a new Latin America distributor agreement with our long-time partner DePuy Mitek. Our recently launched MONOVISC single-injection osteoarthritis product is being well received in Europe. We recently completed a six-month clinical study in the EU with very positive preliminary data and are looking forward to introducing MONOVISC to additional European markets that are predisposed to a single-injection osteoarthritis treatment option. We also are making good progress on our U.S. pivotal trial for MONOVISC and expect to complete enrollment in the fourth quarter of this year.”
“Another highlight of the quarter was the fast launch of our ELEVESS cosmetic dermal filler in the U.S. with our partner Artes Medical,” continued Sherwood. “In less than two months, we achieved strong sales and are on track to reach our target of between $1.0 and $1.5 million in revenue for Anika by the end of the year. The product has been well received by both doctors and patients alike and we are very pleased with the capabilities of the Artes team in introducing this product to the marketplace. ELEVESS has generated great interest in other areas around the world, and shortly after the close of the quarter, we signed a distribution agreement for the fast-growing Canadian market, as well as recently announced agreements for Mexico, Chile, Peru and Korea.”
“In our other product lines, HYVISC for equine arthritis continued to outperform our expectations by posting a 28 percent increase in unit sales for the quarter. We are one of the recognized leaders in the field with this product and look forward to continued growth. Our ophthalmic surgery products, also considered the gold standard in the market, continued to perform well. We also are seeing interest in a number of markets for our INCERT® line of adhesion prevention products.”
“For the remainder of the year, we will continue to focus on growing our joint health franchise in the U.S. and around the globe, adding international distribution partners for ELEVESS, and making the investments needed to leverage our industry-leading HA technology into new products,” concluded Sherwood.
Conference Call Information
Anika will hold a conference call to discuss its financial results, business highlights and outlook on Tuesday, November 4, 2008, at 9:00 a.m. ET. In addition, the Company will answer questions concerning business and financial developments and trends, and other business and financial matters affecting the Company, some of the responses to which may contain information that has not been previously disclosed.
To listen to the conference call, dial 800-295-4740 (International callers dial 617-614-3925) and use the passcode 25554560. Please call approximately 10 minutes before the starting time and reference Anika Therapeutics. In addition, the conference call will be available to interested parties through a live audio Internet broadcast at www.anikatherapeutics.com. The call will be archived and accessible on the same website shortly after the conclusion of the call.
About Anika Therapeutics, Inc.
Headquartered in Bedford, Mass., Anika Therapeutics, Inc. develops, manufactures and commercializes therapeutic products for tissue protection, healing and repair. These products are based on hyaluronic acid (HA), a naturally occurring, biocompatible polymer found throughout the body. Anika’s products include ORTHOVISC®, a treatment for osteoarthritis of the knee available internationally and marketed in the U.S. by DePuy Mitek; HYVISC®, a treatment for equine osteoarthritis marketed in the U.S. by Boehringer Ingelheim Vetmedica, Inc.; the ELEVESS™ family of aesthetic dermatology products for facial wrinkles, scar remediation and lip augmentation; AMVISC®, AMVISC® Plus, STAARVISC™-II and Shellgel™ injectable viscoelastic HA products for ophthalmic surgery; INCERT®, an HA-based anti-adhesive for surgical applications; ORTHOVISC® mini a treatment for osteoarthritis targeting small joints
and available in Europe; MONOVISC™ a single-injection osteoarthritis product based on our proprietary cross-linking technology and also available in Europe; and next generation products for joint health and aesthetic dermatology based on the Company’s proprietary, chemically modified HA.
The statements made in this press release which are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements that may be identified by words such as "expectations," "remains," "focus," "expected," "prospective," "expanded," "building," "continued," "progress," “plan(s),” "efforts," "hope," "believe," "objectives," "opportunities," "will," "seek," “expect,” “invest,” “signing,” “on track” and other expressions which are predictions of or indicate future events and trends and which do not constitute historical matters identify forward-looking statements. These statements also include: (i) the company's expectations regarding its cosmetic dermatology product, ELEVESS™, (ii) product gross margin (iii) the company’s expectations concerning its MONOVISC product, (iv) statements concerning continued strong revenue growth from the current year’s expenditures on R&D and marketing, as well as our new facility buildout, (v)our expectations to complete enrollment in the U.S. MONOVISC clinical trial in the fourth quarter of 2008, and (vi) statements concerning market reception and revenue growth . These statements are based upon the current beliefs and expectations of the company's management and are subject to significant risks, uncertainties and other factors. The company's actual results could differ materially from any anticipated future results, performance or achievements described in the forward-looking statements as a result of a number of factors. Certain other factors that might cause the company's actual results to differ materially from those in the forward-looking statements include those set forth under the headings "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in each of the company's Annual Report on Form 10-K for the year ended December 31, 2007 and on Form 10-Q for the periods ended March 31,and June 30, 2008, as well as those described in the company's other press releases and SEC filings.
| Anika Therapeutics, Inc. and Subsidiary |
| Consolidated Statements of Operations |
| (unaudited) |
| | | | | | | | |
| | Quarter Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 |
| Product revenue | | $ | 8,523,765 | | $ | 7,283,129 | | $ | 24,770,230 | | $ | 18,989,133 |
| Licensing, milestone and contract revenue | | | 681,250 | | | 682,251 | | | 2,043,753 | | | 2,213,855 |
| Total revenue | | | 9,205,015 | | | 7,965,380 | | | 26,813,983 | | | 21,202,988 |
| | | | | | | | |
| Operating expenses: | | | | | | | | |
| Cost of product revenue | | | 3,504,986 | | | 3,138,307 | | | 10,365,586 | | | 8,655,010 |
| Research & development | | | 1,801,561 | | | 1,125,826 | | | 4,954,520 | | | 2,969,218 |
| Selling, general & administrative | | | 2,567,000 | | | 1,820,998 | | | 8,515,772 | | | 5,112,147 |
| Total operating expenses | | | 7,873,547 | | | 6,085,131 | | | 23,835,878 | | | 16,736,375 |
| Income from operations | | | 1,331,468 | | | 1,880,249 | | | 2,978,105 | | | 4,466,613 |
| Interest income, net | | | 130,486 | | | 550,014 | | | 477,767 | | | 1,692,622 |
| Income before income taxes | | | 1,461,954 | | | 2,430,263 | | | 3,455,872 | | | 6,159,235 |
| Provision for income taxes | | | 357,751 | | | 634,033 | | | 921,182 | | | 1,797,377 |
| Net income | | $ | 1,104,203 | | $ | 1,796,230 | | $ | 2,534,690 | | $ | 4,361,858 |
| Basic net income per share: | | | | | | | | |
| Net income | | $ | 0.10 | | $ | 0.16 | | $ | 0.22 | | $ | 0.40 |
| Basic weighted average common shares outstanding | | | 11,329,422 | | | 11,152,686 | | | 11,294,928 | | | 11,018,208 |
| Diluted net income per share: | | | | | | | | |
| Net income | | $ | 0.10 | | $ | 0.16 | | $ | 0.22 | | $ | 0.38 |
| Diluted weighted average common shares outstanding | | | 11,485,989 | | | 11,568,074 | | | 11,479,797 | | | 11,438,673 |
| Anika Therapeutics, Inc. and Subsidiary |
| Consolidated Balance Sheets |
| (unaudited) |
| | | | |
| | September 30, | | December 31, |
| | | 2008 | | | 2007 |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 35,368,244 | | $ | 35,903,569 |
| Short-term investments | | | — | | | 3,501,974 |
| Accounts receivable, net | | | 6,529,709 | | | 5,795,973 |
| Inventories | | | 5,040,565 | | | 4,390,118 |
| Current portion deferred income taxes | | | 1,657,007 | | | 1,657,007 |
| Prepaid expenses and other | | | 332,283 | | | 1,194,081 |
| Total current assets | | | 48,927,808 | | | 52,442,722 |
| Property and equipment, at cost | | | 41,179,203 | | | 28,101,422 |
| Less: accumulated depreciation | | | (9,852,157) | | | (8,731,706) |
| | | 31,327,046 | | | 19,369,716 |
| Long-term deposits and other | | | 561,334 | | | 433,081 |
| Intangible asset, net | | | 950,981 | | | 995,098 |
| Deferred income taxes | | | 6,524,229 | | | 6,256,067 |
| Total Assets | | $ | 88,291,398 | | $ | 79,496,684 |
| | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| | | | |
| Accounts payable | | $ | 2,736,450 | | $ | 4,866,619 |
| Accrued expenses | | | 2,768,668 | | | 2,760,010 |
| Deferred revenue, current | | | 2,813,024 | | | 2,806,778 |
| Income taxes payable | | | 494,067 | | | 203,954 |
| Other long-term liabilities | | | 729,271 | | | 398,365 |
| Long-term deferred revenue | | | 11,475,001 | | | 13,500,001 |
| Long-term debt | | | 8,000,000 | | | - |
| Total liabilities | | | 29,016,481 | | | 24,535,727 |
| Stockholders’ equity | | | | |
| Preferred stock | | | — | | | — |
| Common stock | | | 113,534 | | | 112,233 |
| Additional paid-in-capital | | | 42,473,909 | | | 40,695,940 |
| Retained earnings | | | 16,687,474 | | | 14,152,784 |
| Total stockholders’ equity | | | 59,274,917 | | | 54,960,957 |
| Total Liabilities and Stockholders’ Equity | | $ | 88,291,398 | | $ | 79,496,684 |
| Anika Therapeutics, Inc. and Subsidiary |
| Supplemental Financial Data - |
| (unaudited) |
| | | | | | | | | | | | | | | | |
| Product Gross Margin and Revenue by Product Line |
| | | | | | | | | | | | | | | | |
| | Quarter Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | | 2008 | | % Ttl | | | 2007 | | % Ttl | | | 2008 | | % Ttl | | | 2007 | | % Ttl |
| Ophthalmic | | $ | 2,703,095 | | 32% | | $ | 2,893,906 | | 40% | | $ | 8,283,984 | | 33% | | $ | 8,068,611 | | 42% |
| Joint Health | | | 4,676,247 | | 55% | | | 3,596,395 | | 49% | | | 13,563,901 | | 55% | | | 8,894,752 | | 47% |
| Veterinary | | | 706,553 | | 8% | | | 552,773 | | 8% | | | 2,427,570 | | 10% | | | 1,682,870 | | 9% |
| Aesthetics | | | 383,320 | | 4% | | | 222,220 | | 3% | | | 399,370 | | 2% | | | 224,220 | | 1% |
| Other | | | 54,550 | | 1% | | | 17,835 | | 0% | | | 95,405 | | 0% | | | 118,680 | | 1% |
| | $ | 8,523,765 | | 100% | | $ | 7,283,129 | | 100% | | $ | 24,770,230 | | 100% | | $ | 18,989,133 | | 100% |
| | | | | | | | | | | | | | | | |
| Product gross profit | | $ | 5,018,779 | | | | $ | 4,144,822 | | | | $ | 14,404,644 | | | | $ | 10,334,123 | | |
| Product gross margin | | | 59% | | | | | 57% | | | | | 58% | | | | | 54% | | |
| | | | | | | | | | | | | | | | |
| Product Revenue by Geography |
| | | | | | | | | | | | | | | | |
| | Quarter Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | | 2008 | | % Ttl | | | 2007 | | % Ttl | | | 2008 | | % Ttl | | | 2007 | | % Ttl |
| Domestic | | $ | 6,062,837 | | 71% | | $ | 5,057,754 | | 69% | | $ | 18,180,180 | | 73% | | $ | 14,176,658 | | 75% |
| International | | | 2,460,928 | | 29% | | | 2,225,375 | | 31% | | | 6,590,050 | | 27% | | | 4,812,475 | | 25% |
| | $ | 8,523,765 | | 100% | | $ | 7,283,129 | | 100% | | $ | 24,770,230 | | 100% | | $ | 18,989,133 | | 100% |
CONTACT:
Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., CEO, 781-457-9000
or
Kevin W. Quinlan, CFO, 781-457-9000
